Today Sears announcing the closure of another 150 stores, but this is what could really spell trouble…

From Art Cashin:  On this day (+1) in 1775, at the second Virginia Convention, in the city of Richmond, a firebrand delegate rose and cut through the smoke of compromise. His speech was unique. As any public speaker will tell you, a good speech is one where the audience stays awake. A great speech is one that changes the mind of the audience. But best of all is a speech that outlives the event and maybe even outlives the speaker. 

Well, this was some speech. The speaker’s name was Patrick Henry. And the awesome construction, pacing and ringing of his speech was so great that it ranks in the English language as one of the five best (Shakespeare’s “Marc Antony’s eulogy of Caesar”; the Gettysburg Address and, of course, some great Winston Churchill edging it out). But every schoolboy knows the climax of this great speech – – “….Our brethren are already in the field. Why stand we here idle? What is it that gentlemen wish? What would they have? Is life so dear….or peace so sweet as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take, but as for me, give me Liberty or give me Death!” 

To mark the date stop by the House of Burgess Tavern and order some “Liberty” Ale. But, if they don’t have Liberty on tap, try not to be too picky. 

Wall Street stocks were anything but picky yesterday as political and lending issues combined to crush the 110 day streak of trading days without a one percent fall. 

Worries On Trump Agenda And Concern About Car Loans Help Drive Stocks Lower – U.S. stocks opened with a mild rally that instantly evaporated and then reversed sharply to the downside. 

The TV pundits at first seemed baffled by the move and then began flailing about to find the “trigger” of the “surprise” selloff. 

The media confusion lingered, which prompted me to send this midday note to some friends: 

Market selloff. Slightly delayed reaction to Ally Bank comment that prices of used cars are vulnerable. That cut legs out from the likes of Avis and several regional banks. Now add in crude breaking $48. Also second thoughts on votes for healthcare Thursday (backs up agenda). 

So also from comments that reform bill does not work without the border tax. 

The Ally Bank connection was missed by many pundits but I think they were causative and important. 

For decades, auto loans tended to be about three years in duration. With the recession, wage growth began to stagnate and to keep the business, banks began to “help” car buyers stretch their limited dollars by increasing duration from three to four, then to five and even six years. Thus, you still had to pay back the $5000 but in many smaller payments. 

While it’s not the size of the mortgage problem, it is a huge, huge pile of doubtful debt. So that’s why the Ally call set off alarms, aided and abetted by recent reports of growing auto loan delinquencies. 

As noted that hit regional banks, many of whom have auto loan portfolios. Other areas were (as noted), stocks like Avis, Auto Nation and the auto majors. The loan concern spilled into a flight to safety. 

Concerns about the Trump agenda stalling were also a key part. A friend was kind enough to pass along some comment from the ever sharp-eyed Greg Valliere yesterday. …...more here